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I like propublica's reporting on this but geez, this needs an award for one of the top HN obsessions. Within the past 7 months: TurboTax’s 20-Year Fight to Sto

by fedups 7y ago

I like propublica's reporting on this but geez, this needs an award for one of the top HN obsessions. Within the past 7 months: TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free; 211 points -- 54 minutes ago TurboTax to charge more lower-income customers; 144 points -- 3 months ago Congress Scraps Provision to Restrict IRS from Competing with TurboTax; 82 points -- 4 months ago Listen to TurboTax Lie to Get Out of Refunding Overcharged Customers; 171 points -- 5 months ago TurboTax Uses a “Military Discount” to Trick Troops into Paying to File Taxes; 170 points -- 5 months ago TurboTax and H&R Block Saw Free Tax Filing as a Threat; 355 points -- 6 months ago TurboTax Hides Its Free File Page from Search Engines; 881 points -- 6 months ago TurboTax Uses Dark Patterns to Trick You into Paying to File Your Taxes; 608 points -- 6 months ago How the Maker of TurboTax Fought Free, Simple Tax Filing (2013); 462 points -- 7 months ago edit: if you _still_ haven't gotten enough TurboTax reporting, there's a great Reply All episode that covers propublica's reporting as well https://gimletmedia.com/shows/reply-all/6nhgol https://gimletmedia.com/shows/reply-all/6nhgol

ISL 7y ago
And yet the cost of implementing a government algorithm has not yet fallen to near-zero. Furthermore, the government has surely implemented the algorithm itself in order to verify submitted tax returns, so the implementation cost of pre-computing everyone's tax should be comparatively small.
- chrismeller 7y ago
  Maybe I’m overly cynical, but creating tax returns for everyone for free would prevent the IRS from allowing you to incriminate yourself by mis-filing (intentionally or not) and then levying huge penalties and interest on you 10 years later. Everyone is hating on TurboTax for making money, but they’re pretending the government tax machine has no such motivation, which simply is not true.
  - sergiosgc 7y ago
    > Maybe I’m overly cynical, but creating tax returns for everyone for free would prevent the IRS from allowing you to incriminate yourself by mis-filing (intentionally or not) and then levying huge penalties and interest on you 10 years later. Many countries pre-fill the tax return, but require the citizen to submit it. The citizen is responsible for the submitted information, not the government.
    - adolph 7y ago
      That would expose the level of identity theft that the IRS does nothing about and actively tries to hide by refusing to provide identity theft victims with documentation. https://web.archive.org/web/20161209003500/http://www.ayotte.senate.gov/?p=press_release&id=1971 https://web.archive.org/web/20161209003500/http://www.ayotte...
  - andykellr 7y ago
    They can't levy huge penalties and interest on you 10 years later. Generally they have 3 years or maybe 6 [0]. [0] https://www.americanbar.org/groups/business_law/publications/blt/2017/08/06_wood/ https://www.americanbar.org/groups/business_law/publications...
    - chrismeller 7y ago
      Thanks, I know it’s not 10, I just picked a round number because nothing was supposed to be that specific. Don’t be so literal...
      - tasty_freeze 7y ago
        There is a word for what you did: exaggeration. But your exaggeration was small enough that it was believable and thus misleading. Now you are criticizing someone for giving a factual response. Time for some reflection.
        chrismeller 7y ago
        It’s just sad that you can’t see a difference between an example and an exaggeration. I wasn’t giving tax advice, I was making a point about the IRS penalizing people. The specific amount of time involved could not possibly matter any less... the point is still valid. I’m sure you never round your income down or your donations up and you never, ever! go even a mile over the posted speed limit. I’m glad you can take this as an example of your own self-richeousness. Don’t confuse that with real life.
        Chris_Chambers 7y ago
        Sure, it’s “exaggeration” if you have no imagination. Maybe someone is hit with penalties 3 or 6 years later, but then they’re consequently permanently flagged to get aggressively audited for the rest of their life and continue to deal with penalties for much longer than 10 years. There’s a word for what you’re doing: Pedantry. There’s also another word for what you’re doing: Bootlicking. The person you’re responding to is gracefully opening the door to questioning authority and you’re not only pushing it closed on his foot on behalf of your masters but you’re doing it for free. People like you are absolute garbage. And your little condescending cherry on top “Time for some reflection” is just nauseating. Maybe it’s time for you to look up some suicide techniques.
  - chipotle_coyote 7y ago
    Yeah, that's overly cynical. :) If they switched to a pre-filled system, the revenue from penalties would go down, but it's quite likely the amount they would bring in would actually go up, assuming this reduced tax fraud. In 2016, they charged $24.1 billion in penalties -- but they estimate tax fraud cost them around $458 billion. If they lost 90% of the revenue for the penalties but cut the tax fraud even by 25%, they would be way, way ahead.
  - JamesBarney 7y ago
    The government tax machine is in the business of collecting taxes, not running up fines. I've had several interactions where the IRS was totally with in their rights to fine me but they waved each fine because they understood it was unintentional. The only times I've heard of the IRS going after people who unintentionally violated the rules, they were intentionally and obviously violating the spirit of the law but thought they were within the letter and were wrong. In my experience you can make a good faith effort to figure out what your supposed to owe and pay it. In this case the IRS will treat you fairly and waive all types of fines. Or you can try to aggressively avoid taxes that you should owe in spirit. And in this case you have to be damn sure you're within the letter of the law because the IRS will try to hammer you if you color outside the lines. These seem like two fair options to me. And everyone I know who was slammed by the IRS was doing the latter.
  - pfranz 7y ago
    I haven't looked this up, but I'm pretty sure audits are way down. There was a recent an article saying the IRS was focusing on auditing poorer people because it's too expensive to audit rich people. Since their budget is completely separate from tax income (and their budget has consistently been reduced), it was driven by their local incentives even if that means total tax income was way lower.
delfinom 7y ago
So what? Fuck TurboTax trying to rent seek mine and anyone's ability to pay taxes. What's next? Feudalism?
- chrismeller 7y ago
  You know, there’s a paper form you can fill out and send in for free if you’re that angry about it.
  - tombert 7y ago
    Sure, that's always an option, but due the complexity of the tax codes, it's very easy to make a mistake when doing everything yourself. For example, I used to work in New Jersey, and live in New York, meaning I would have to file two state tax returns, in addition to the federal. There are weird rules that you can deduct one state's taxes from the other, and then deduct the remainder from the federal taxes. The rules get complex really quickly, and even with helpful software I made a mistake one year resulting in a fine. I can't imagine how frequently I'd make mistakes if I had to do it manually. TurboTax definitely provides a service by making it so that schmucks like me can do taxes, but if the tax code is that complex, shouldn't we have a software like this for free? At the very least, to provide some motivations to politicians to help simplify the tax code?
    - inetknght 7y ago
      How much was the fine? What sort of mistake was made?
      - tombert 7y ago
        Fine wasn't that big, on the order of $150. It wasn't actually directly due to the multi-state thing. I paid for my wife's college, and NY has a thing to let you deduct tuition from dependents on taxes. I had forgotten to attach the proof of payment for tuition, leading to me getting audited (in the most technical send of the word) and fined slightly. The biggest pain in the ass was the back-and-forth I had to do to close my case, which involved me faxing things multiple times.
detcader 7y ago
It's an issue that affects almost every American, why not obsess? I've seen two stories in the past day about Google Nest which affects maybe 10%? What a bizarre obsession.
jjulius 7y ago
That's an average of 5.28 months ago, which would've been around the beginning of May, less than a month after taxes were due to be filed. Three of the articles are from 6 months ago (mid-April), and one from 7 months ago (before filing was due). It shouldn't come as a surprise that taxes, and the cost to file them, would be fresh on peoples minds at that time.
grecy 7y ago
Americans are starting to wake up to the fact they live in what is by far the richest country, but that the systems in place just make the rich richer, while nothing is done to improve the lives of the middle and lower classes. In this particular case, the rich are actively using the system to stop an improvement to the quality of life of regular people. What's the point in living in the richest country in the world when your quality of life is lower than many countries that don't have nearly so much money?
- throwaway2048 7y ago
  The fact that America has the 10th highest GDP per capita [1] and huge swaths of it are little better off than a third world nation is a complete disgrace. 1: (its 4 micro city states above it, which are economically special, and 5 nations that could reasonably be considered full sized countries, however all of them still have relatively small populations)
- Akinato 7y ago
  I would argue that there are few, if any, countries in the world that this description would not apply to. However, I agree with the point that you're making wholeheartedly. There's a very serious amount of wealth disparity around the world, and the rich have gotten so rich that they can't even feasibly spend all of their money if they had to.
  - grecy 7y ago
    You need to spend more time in better countries. The lives of middle and lower class people in Australia, Canada, Scandinavia, etc. are much, much, much better than Americans, and improving all the time.
    - joenot443 7y ago
      Do you think so? I live in Toronto and wealth inequality is still constantly at the forefront of political discourse. Obviously Toronto isn't indicative of the rest of Canada, but I don't feel as if poor Canadians are especially better off than poor Americans.
draw_down 7y ago
Come on
mixmastamyk 7y ago
This is a site for "disrupting" anti-competitive bullshit, what did you expect?

by fedups 7y ago

ISL 7y ago

And yet the cost of implementing a government algorithm has not yet fallen to near-zero. Furthermore, the government has surely implemented the algorithm itself in order to verify submitted tax returns, so the implementation cost of pre-computing everyone's tax should be comparatively small.

chrismeller 7y ago
Maybe I’m overly cynical, but creating tax returns for everyone for free would prevent the IRS from allowing you to incriminate yourself by mis-filing (intentionally or not) and then levying huge penalties and interest on you 10 years later. Everyone is hating on TurboTax for making money, but they’re pretending the government tax machine has no such motivation, which simply is not true.
- sergiosgc 7y ago
  > Maybe I’m overly cynical, but creating tax returns for everyone for free would prevent the IRS from allowing you to incriminate yourself by mis-filing (intentionally or not) and then levying huge penalties and interest on you 10 years later. Many countries pre-fill the tax return, but require the citizen to submit it. The citizen is responsible for the submitted information, not the government.
  - adolph 7y ago
    That would expose the level of identity theft that the IRS does nothing about and actively tries to hide by refusing to provide identity theft victims with documentation. https://web.archive.org/web/20161209003500/http://www.ayotte.senate.gov/?p=press_release&id=1971 https://web.archive.org/web/20161209003500/http://www.ayotte...
- andykellr 7y ago
  They can't levy huge penalties and interest on you 10 years later. Generally they have 3 years or maybe 6 [0]. [0] https://www.americanbar.org/groups/business_law/publications/blt/2017/08/06_wood/ https://www.americanbar.org/groups/business_law/publications...
  - chrismeller 7y ago
    Thanks, I know it’s not 10, I just picked a round number because nothing was supposed to be that specific. Don’t be so literal...
    - tasty_freeze 7y ago
      There is a word for what you did: exaggeration. But your exaggeration was small enough that it was believable and thus misleading. Now you are criticizing someone for giving a factual response. Time for some reflection.
      - chrismeller 7y ago
        It’s just sad that you can’t see a difference between an example and an exaggeration. I wasn’t giving tax advice, I was making a point about the IRS penalizing people. The specific amount of time involved could not possibly matter any less... the point is still valid. I’m sure you never round your income down or your donations up and you never, ever! go even a mile over the posted speed limit. I’m glad you can take this as an example of your own self-richeousness. Don’t confuse that with real life.
      - Chris_Chambers 7y ago
        Sure, it’s “exaggeration” if you have no imagination. Maybe someone is hit with penalties 3 or 6 years later, but then they’re consequently permanently flagged to get aggressively audited for the rest of their life and continue to deal with penalties for much longer than 10 years. There’s a word for what you’re doing: Pedantry. There’s also another word for what you’re doing: Bootlicking. The person you’re responding to is gracefully opening the door to questioning authority and you’re not only pushing it closed on his foot on behalf of your masters but you’re doing it for free. People like you are absolute garbage. And your little condescending cherry on top “Time for some reflection” is just nauseating. Maybe it’s time for you to look up some suicide techniques.
- chipotle_coyote 7y ago
  Yeah, that's overly cynical. :) If they switched to a pre-filled system, the revenue from penalties would go down, but it's quite likely the amount they would bring in would actually go up, assuming this reduced tax fraud. In 2016, they charged $24.1 billion in penalties -- but they estimate tax fraud cost them around $458 billion. If they lost 90% of the revenue for the penalties but cut the tax fraud even by 25%, they would be way, way ahead.
- JamesBarney 7y ago
  The government tax machine is in the business of collecting taxes, not running up fines. I've had several interactions where the IRS was totally with in their rights to fine me but they waved each fine because they understood it was unintentional. The only times I've heard of the IRS going after people who unintentionally violated the rules, they were intentionally and obviously violating the spirit of the law but thought they were within the letter and were wrong. In my experience you can make a good faith effort to figure out what your supposed to owe and pay it. In this case the IRS will treat you fairly and waive all types of fines. Or you can try to aggressively avoid taxes that you should owe in spirit. And in this case you have to be damn sure you're within the letter of the law because the IRS will try to hammer you if you color outside the lines. These seem like two fair options to me. And everyone I know who was slammed by the IRS was doing the latter.
- pfranz 7y ago
  I haven't looked this up, but I'm pretty sure audits are way down. There was a recent an article saying the IRS was focusing on auditing poorer people because it's too expensive to audit rich people. Since their budget is completely separate from tax income (and their budget has consistently been reduced), it was driven by their local incentives even if that means total tax income was way lower.

delfinom 7y ago

So what? Fuck TurboTax trying to rent seek mine and anyone's ability to pay taxes. What's next? Feudalism?

chrismeller 7y ago
You know, there’s a paper form you can fill out and send in for free if you’re that angry about it.
- tombert 7y ago
  Sure, that's always an option, but due the complexity of the tax codes, it's very easy to make a mistake when doing everything yourself. For example, I used to work in New Jersey, and live in New York, meaning I would have to file two state tax returns, in addition to the federal. There are weird rules that you can deduct one state's taxes from the other, and then deduct the remainder from the federal taxes. The rules get complex really quickly, and even with helpful software I made a mistake one year resulting in a fine. I can't imagine how frequently I'd make mistakes if I had to do it manually. TurboTax definitely provides a service by making it so that schmucks like me can do taxes, but if the tax code is that complex, shouldn't we have a software like this for free? At the very least, to provide some motivations to politicians to help simplify the tax code?
  - inetknght 7y ago
    How much was the fine? What sort of mistake was made?
    - tombert 7y ago
      Fine wasn't that big, on the order of $150. It wasn't actually directly due to the multi-state thing. I paid for my wife's college, and NY has a thing to let you deduct tuition from dependents on taxes. I had forgotten to attach the proof of payment for tuition, leading to me getting audited (in the most technical send of the word) and fined slightly. The biggest pain in the ass was the back-and-forth I had to do to close my case, which involved me faxing things multiple times.

detcader 7y ago

It's an issue that affects almost every American, why not obsess? I've seen two stories in the past day about Google Nest which affects maybe 10%? What a bizarre obsession.

jjulius 7y ago

That's an average of 5.28 months ago, which would've been around the beginning of May, less than a month after taxes were due to be filed. Three of the articles are from 6 months ago (mid-April), and one from 7 months ago (before filing was due). It shouldn't come as a surprise that taxes, and the cost to file them, would be fresh on peoples minds at that time.

grecy 7y ago

Americans are starting to wake up to the fact they live in what is by far the richest country, but that the systems in place just make the rich richer, while nothing is done to improve the lives of the middle and lower classes. In this particular case, the rich are actively using the system to stop an improvement to the quality of life of regular people. What's the point in living in the richest country in the world when your quality of life is lower than many countries that don't have nearly so much money?

throwaway2048 7y ago
The fact that America has the 10th highest GDP per capita [1] and huge swaths of it are little better off than a third world nation is a complete disgrace. 1: (its 4 micro city states above it, which are economically special, and 5 nations that could reasonably be considered full sized countries, however all of them still have relatively small populations)
Akinato 7y ago
I would argue that there are few, if any, countries in the world that this description would not apply to. However, I agree with the point that you're making wholeheartedly. There's a very serious amount of wealth disparity around the world, and the rich have gotten so rich that they can't even feasibly spend all of their money if they had to.
- grecy 7y ago
  You need to spend more time in better countries. The lives of middle and lower class people in Australia, Canada, Scandinavia, etc. are much, much, much better than Americans, and improving all the time.
  - joenot443 7y ago
    Do you think so? I live in Toronto and wealth inequality is still constantly at the forefront of political discourse. Obviously Toronto isn't indicative of the rest of Canada, but I don't feel as if poor Canadians are especially better off than poor Americans.

draw_down 7y ago

Come on

mixmastamyk 7y ago

This is a site for "disrupting" anti-competitive bullshit, what did you expect?